Pray for the best, Prepare for the worst: Lessons in home ownership

In 2005, my then-boyfriend (now husband) and I bought a condo in Chicago at the height of the real estate bubble. I didn’t know the first thing about the nitty-gritty parts of the home buying experience. I just loved the unit, the view and the proximity to everything. So I signed on the dotted lines (all of them) and hoped for the best. After all, what could go wrong? Ha!

When the housing bubble burst, our condo lost half its value almost overnight. We accepted a move to Atlanta, got married, started a family and still had this condo, like a ball and chain around our necks, for years. We finally got out from under it two years ago, but the stress it caused financially and emotionally was enormous.

Fast forward to today, we are looking to buy a house again. We have four kids and need to settle down in a home, not just another place to live. This time though, since I am older and wiser, I am educating myself on the ins and outs of the home buying process. I am making sure I am prepared for the worst, while still praying for the best.

Since I am on a self-education quest, here are three important things I’ve learned about buying a home:

1. Understand PMI (private mortgage insurance). This is a fee you will pay if you put down less than 20% for a down payment. When calculating how much owning a particular home will cost you, don’t forget about PMI. This fee may help you qualify for a loan faster and get you into a home quicker though, so it is not necessarily a bad thing depending on your situation.

2. Housing markets DO go down. Plan to be in your home for at least five years before thinking of selling it. Even though the markets are slowly turning around (in some areas more than others) you can’t plan on a quick “flip”. Buy a home you want to live in and you wont have to worry (too much) about its resale value.

3. Location, location, location. Just because your kids aren’t old enough to attend school now doesn’t mean you don’t have to check out the public school options for the house your looking to buy. Private schools in many places can cost upwards of $20,000 per year, per child, while public schools are free. When you’re house hunting with kids in tow, there are many factors to consider. Check out the2012 list of best places to raise children for some great information about cities in your own state.

Buying a home can be scary, but it also can be a source of pride. Just be smart and learn from the lessons this recession (should have) taught us all. Want to hear more? Check out Brian’s home ownership story:

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This post was sponsored by Genworth Financial. As always the opinions are my own. And remember, they are opinions. Please seek out your own financial advise to fit your specific situation.